Based on new analysis, the typical worker in the UK would have to work 52 years' worth of earnings to attain the wealth level of the richest 10% of the population.
Expanding Financial Divide Across Decades
This research reviewed net worth statistics including the 2020-22 timeframe and discovered that during 2006-08, it would have taken 38 years' worth of average worker salary to enter the top 10th of the wealth distribution.
A senior economist associated with the report observed: "Financial divides in Britain are currently so significant that a typical full-time employee accumulating their complete salary across their entire working life would continue to be incapable to attain the highest level of the financial hierarchy."
Measuring the Wealth Divide
The analysis found that the disparity between the net worth of the average person and a person belonging to the richest segment was £1 million in the mid-2000s, but had expanded to £1.3 million in real terms by 2020-22.
The researcher continued: "These disparities are particularly worrying as wealth mobility in Britain is limited – those who commence life affluent tend to stay wealthy, and conversely applies."
Relative Wealth Inequality
Although the wealth gap expanding in actual numbers, the portion of overall assets in the UK owned by the wealthiest families – known as "relative wealth inequality" – has been "largely unchanged since the 1980s," according to the research.
Over this timeframe, total wealth in the UK increased dramatically from thrice the gross domestic product, to almost 7.5 times.
Drivers of Wealth Inequality
So-called "unearned" gains, by means of growing real estate costs and variations in superannuation evaluations, were the primary factors of the widening wealth gap over the past decade, according to the report.
These gains tended to accrue to senior citizens with real estate, the research shows – intensifying the generational financial disparity.
Generational Wealth Disparities
The typical financial disparity between thirty-somethings and people aged 60-64 grew by more than 100% in real terms, from £135k in 2006-08, to £310,000.
Area-Based Variations
Furthermore, the study revealed stark regional variations, with the typical amount of wealth in recent years standing at 290 thousand pounds in the SE of England, where housing costs have tended to rise rapidly, versus £110,000 in the northeastern region.
Pandemic Period Consequences
During the pandemic, when numerous employees were protected by the government-supported job retention program, and pandemic lockdowns limited opportunities for spending, the statistics indicate many households were capable of accumulating, growing their net worth.
Wealthier families performed significantly better, however. "The typical family in the bottom income bracket saw their cash reserves grow by only eighty pounds during the COVID years (2019-20 to 2021-22), approximately equivalent to the two years pre-pandemic. In contrast, the median home in the top income bracket saw their cash reserves increase by £4,200," the analysis concludes.
